Key Performance Indicators

Key Performance Indicators
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Parmenter David. Key Performance Indicators

About the Author

Preface

Why This Book Should Interest You

Barriers to KPIs Working Properly

Changes in Winning KPI Methodology

Chief Measurement Officer's Toolkit

Acknowledgments

Part I. Setting the Scene

Chapter 1. The Great KPI Misunderstanding

Key Result Indicators

Result Indicators

Performance Indicators

Key Performance Indicators

Seven Characteristics of KPIs

Difference between KRIs and KPIs and RIs and PIs

Lead and Lag Confusion

Number of Measures Required – The 10/80/10 Rule

Importance of Timely Measurement

Chapter 2. The Myths of Performance Measurement

Myth #1: Most Measures Lead to Better Performance

Myth #2: All Measures Can Work Successfully in Any Organization, At Any Time

Myth #3: All Performance Measures Are KPIs

Myth #4: By Tying KPIs to Remuneration You Will Increase Performance

Myth #5: We Can Set Relevant Year-End Targets

Myth #6: Measuring Performance Is Relatively Simple and the Appropriate Measures Are Obvious

Myth #7: KPIs Are Financial and Nonfinancial Indicators

Myth #8: You Can Delegate a Performance Management Project to a Consulting Firm

Chapter 3. Unintended Consequence: The Dark Side of Measures

Example: City Train Service

Example: Accident and Emergency Department

Examples from Dean Spitzer's Book

Performance-Related Pay

Chapter 4. Revitalizing Performance

Five Foundation Stones

Chapter 5. Strategy and Its Relevance to Performance Measures

Articulate Your Organization's Mission, Vision, Values, and Lean Management Principles

Create a Strategy That Is Understood by Staff

Ensure That Your Strategy Is Balanced

Monitor Implementation of Your Strategy

Part II. Winning KPI Methodology

Chapter 6. Background to the Winning KPI Methodology and Its Migration

The Original 12-Step Process

The New Six-Stage Process

Winning KPI Methodology and Its Migration

An Overview of the Six Stages

Chapter 7. Foundation Stones for Implementing Key Performance Indicators

“Partnership with the Staff, Unions, and Third Parties” Foundation Stone

“Transfer of Power to the Front Line” Foundation Stone

“Measure and Report Only What Matters” Foundation Stone

“Source KPIs from the Critical Success Factors” Foundation Stone

“Abandon Processes That Do Not Deliver” Foundation Stone

“Appointment of a Home-Grown Chief Measurement Officer” Foundation Stone

Chapter 8. Getting the CEO and Senior Management Committed to the Change (Stage 1)

Obtaining Senior Management Team Commitment

Agree on Timing, Resources, and Approach

Benefits of This Stage

Chapter 9. Up-Skill In-House Resources to Manage the KPI Project (Stage 2)

Establish a Winning KPI Team Working Full Time on the Project

Establish a Just-Do-It Culture and Process

Benefits of This Stage

Chapter 10. Leading and Selling the Change (Stage 3)

Leading Change by John Kotter

Learn to Sell by Appreciating the Emotional Drivers of the Buyer

Sales Pitches You Will Need to Make to Get the Go-Ahead

Selling the Winning KPIs to the Organization's Staff

Benefits of This Stage

Chapter 11. Finding Your Organization's Operational Critical Success Factors (Stage 4)

Operational Critical Success Factors versus External Outcomes

Operational Critical Success Factors – The Missing Link

Rules For Ascertaining the Operational Critical Success Factors

Characteristics of Critical Success Factors

Four Tasks for Identifying Operational Critical Success Factors

Alternative Methodologies

Benefits of This Stage

Chapter 12. Determining Measures That Will Work in Your Organization (Stage 5)

How to Derive Measures: An Overview

Ascertain the Team Performance Measures

Recording Performance Measures in a Database

Sorting the Wheat from the Chaff

Find the KRIs That Need to Be Reported to the Board

Find the Winning KPIs

Measures Gallery

Benefits of This Stage

Chapter 13. Get the Measures to Drive Performance (Stage 6)

Develop the Reporting Framework at All Levels

Facilitate the Use of Winning KPIs

Refine KPIs to Maintain Their Relevance

Benefits of This Stage

Chapter 14. Reporting Performance Measures

The Work of Stephen Few in Data Visualization

Reporting the KPIs to Management and Staff

Reporting Performance Measures to Management

Reporting Performance Measures to Staff

Reporting Performance Measures to the Board

Reporting Team Performance Measures

How the Reporting of Performance Measures Fits Together

Part III. Chief Measurement Officer's Toolkit

Chapter 15. Resources for the Chief Measurement Officer

The CMO Needs a Cluster of Mentors

Guidelines for the External KPI Facilitator

Remember the Fundamentals

Resources

Running Workshops

Implementation Lessons

Chapter 16. Case Studies on the Critical Success Factor Workshops

Private Sector Case Study #1: An Asian Conglomerate

Private Sector Case Study #2: Medical Company

Private Sector Case Study #3: Forestry Company

Private Sector Case Study #4: Car Manufacturer

Private Sector Case Study #5: Timber Merchant

Private Sector Case Study #6: Investment Bank

Nonprofit Membership Organization Case Study #2: Surf Life Saving

Government Department Case Study #1

Government Department Case Study #2

Professional Accounting Body Case Study

Charity Case Study

Chapter 17. Common Critical Success Factors and Their Likely Measures

Chapter 18. Comparison to Other Methodologies

Main Differences Between the Balanced-Scorecard and Winning-KPIs Methodologies

Stacey Barr's PuMP

Chapter 19. CEO Toolkit

Letter to You, the Chief Executive Officer

Appendix A. Foundation Stones of Performance-Related Pay Schemes

The Billion-Dollar Giveaway

The Foundation Stones

Appendix B. Draft Job Description for the Chief Measurement Officer

Outline

Duties/Responsibilities of the Chief Measurement Officer

Skills and Experience

Appendix C. Delivering Bulletproof Presentations

Appendix D. Presentation Templates

Appendix E. Performance Measures Database

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DAVID PARMENTER is an international presenter known for his thought-provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning, and lean finance team practices. His work on KPIs is recognized internationally as a breakthrough in understanding how to make performance measures work. He has delivered workshops to thousands of attendees in 30 countries around the world. Parmenter has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and PricewaterhouseCoopers, and is a fellow of the Institute of Chartered Accountants in England and Wales. He is a regular writer for professional and business journals.

He is also the author of Winning CFOs: Implementing and Applying Better Practices, Key Performance Indicators for Government and Non Profit Agencies: Implementing Winning KPIs, and The Leading-Edge Manager's Guide to Success (all from Wiley).

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This recent clarification has fixed an issue I have noted in a number of in-house workshops I have run where there was a mix of operational CSFs and outcomes/impacts. This distinction is important, and while at first, an added complication, it is worth the effort to understand and execute. See Chapter 11 for more detail.

A Simplified Six-Stage Stage Methodology which Incorporates the Original Twelve Steps

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